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Is your tenant screening provider giving you all you need?

Posted by alwaysscreen on May 17, 2012 None comments

If you’re a real estate agent with dozens, perhaps hundreds, of properties to keep track of, then you no doubt already understand the importance of tenant screening, and you rely on its reports to help you make sound decisions about prospective tenants. But when is the last time you researched your options? Are you with the same screening service you signed up with five years ago? Chances are, your business has evolved in those five years. But has your tenant screening service evolved with it?

It might be time to find out more about what your tenant screening service offers, and whether you’re getting the best deal for the package that suits your needs. To get you started, here are a few questions to ask:  

1.  Does your tenant screening provider offer different packages of services? If so, get a detailed list of what each of those packages includes, to make sure you’re signed up for the correct one.

2. Are there other documents, such as rental applications, move-out checklists or FCRA compliance checklists, the provider has that you currently aren’t getting but could be useful to you?

3.  Review your current screening process. What is it missing? Credit report? Eviction history? Employment verification? Rethink what it is you should be screening for, and make sure your provider offers everything. If not, it’s time to find someone who does.

 

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Want rent on time? Try these methods

Posted by alwaysscreen on May 14, 2012 None comments

Getting rent is of the utmost importance to landlords. In the past, a landlord had to rely solely on the tenant to get a check in the mail or hand over the cash on time every month. But now there are other options that give more control to the landlord, which is particularly helpful if you’ve got a tenant with a shaky track record for being on time with rent.

If you’re accepting rent the same old way you always have, it’s time for you to research your options for what could possibly be a more reliable method of receiving timely rental payments. Here are a few to consider:

Direct Debit. This allows the landlord to access the tenant’s bank account on a regular basis to extract the monthly rental payment. The tenant must sign an agreement called the Direct Debit Request, which tells the bank to deduct money from the tenant’s account to pay rent. Some tenants like this setup as it means they no longer have to remember to pay rent on time – it’s done automatically. However, if the tenant doesn’t have sufficient funds in the account on the day of the direct debit, the tenant will be charged a fee.

 Periodic Payment. It allows a regular payment to be made automatically from the tenant’s bank account on or before the same date each month. This is similar to Direct Debit, except the control stays with the tenant, not the landlord; when the funds are short, the tenant can stop the automatic payment or delay it.

Cashier’s Check/Money Order. This is a good option if the tenant has a history of bounced checks. A tenant cannot obtain a cashier’s check or money order unless they have the needed funds in their account, so the amount is automatically taken when the money order is purchased. Hence, there is no risk of the tenant giving you a check that will be denied for insufficient funds.

 

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Teach tenants how to spot rent scams

Posted by alwaysscreen on May 9, 2012 None comments

Scammers have been trying to dupe unsuspecting tenants out of their money for a long time, and pulling off such rent scams have become even easier with the popularity of inexpensive, far-reaching classified outlets like Craigslist and the Penny Saver.

To help protect tenants from losing their money, and to help save the general reputation of landlords, all reputable landlords should do what they can to educate the public about these scams. Use your Facebook page, Twitter feed, office bulletin board and tenant newsletter to give people tips on how to spot a scam, and how to avoid being victimized by one. Tips should include:

  • Don’t pay a deposit up-front, especially without even seeing the property first. Legitimate landlords don’t ask for money before they’ve shown the property and received and reviewed a tenant application.
  • Don’t wire money anywhere; the Federal Trade Commission says this is the biggest tip-off to a scam.
  • If they say they’re out of the country and you’ll get the keys from someone else, it’s a scam.
  • Confirm that an apartment or house is actually for rent. Drive by and compare the phone number and address listed at the property versus what’s listed in the classified ad. Often scammers will select a property that is for sale, or is for rent, by someone else. If you find another ad for the same property under a different name, it’s likely a scam.
  • Do an online search of the landlord. Victims often report scammers on the Web.
  • If the prospective landlord says he isn’t going to conduct a background check, be suspicious. Tenant screening is a tool that reputable landlords use to protect themselves and their property. If the landlord you’re dealing with seems too trusting and eager for money, you might be getting scammed.

 Do your part to protect tenants; they’ll thank you for it by spreading that word that you are a landlord to be trusted.

 

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Use social media to speak to — and to listen – your tenants

Posted by alwaysscreen on May 7, 2012 None comments

Social media has changed the landscape of business, and it’s here to stay. There was a day when a dissatisfied tenant had little recourse beyond expressing his displeasure to the property manager directly or filing a legal complaint against the landlord. Today, that same disgruntled tenant can jump on Twitter, Facebook and other social media outlets and tell hundreds, even thousands, of people exactly how he or she has been wronged by the landlord.

Landlords and property managers who are not using social media as a business, marketing and public relations tool are doing themselves and their business a disservice. To stay on the positive side of social media, landlords should be quick to get the word out about all the great things happening in and around their rental properties. Keep communication positive, informative and honest. People can see right through false claims and public relations spin, so keep it real. It’s not just about how many “likes” you can amass on Facebook; it’s about how many people read what you have to say and walk away liking what you, your business and your property is about.

Perhaps most importantly, use social media as a listening tool as much as a podium for your own message. Pay attention to what tenants and prospective tenants are saying about their experience with you, their wants and needs in rental housing. You can get a leg up on the competition just by taking the time to understand the market you’re serving. They’re talking, and a lot of people are listening. Make sure you are too!  

 

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Landlord, tenant must work together when selling the rental property

Posted by alwaysscreen on May 3, 2012 None comments

If you’re a landlord whose situation has changed and you need or want to sell your rental property, there’s a good way and a bad way about doing it. The good way is to sit down with your tenants as soon as possible and explain the situation.

If you have good tenants who have been there awhile and would like to stay, you need to be on the same page about the upcoming sale. You need your tenant to be agreeable about the sale because it will be up to them to showcase your property in the best possible way. They’ll be in charge of making sure the place is kept clean and tidy, getting rid of excess clutter and keeping all rooms accessible for open houses and walk-throughs with potential buyers.

Explain to your tenants what’s in it for them: The best new landlord possible. Maintaining the property the best possible way will help attract the best buyer, who in turn hopefully will be a great new landlord. On the flip side, if a prospective buyer comes through and sees that the current tenant is not keeping up the place, that buyer might decide that evicting the tenant is the first order of business if they purchase the property.

It’s crucial to work together when selling a property that has current tenants. Hopefully your teamwork will result in a fast sale for you and a great new landlord for them!

 

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Weigh pros and cons before allowing subletters

Posted by alwaysscreen on May 1, 2012 None comments

If you’re a landlord with property near a college campus, then spring is probably a busy time for you. As the semester winds down, students prepare for graduation or summer jobs and internships. Most of the time this involves moving out of the apartment they’ve occupied all year. If you have a college student as a tenant, it’s a good time to check in with him or her and find out their summer plans. If they plan to return for the fall semester, there’s a good chance they might be thinking of subletting the apartment for the summer months. This, of course, is only possible with your permission.

Subletting can be a beneficial way for a tenant to remain on the lease for his or her apartment even if they’ll be away for a few months but plan to return. It gives the landlord a way to continue to receive the monthly rental payment, even while their primary tenant is away. Also, there’s typically no cleaning or maintenance necessary between tenants, as the subletter is only there for a limited time.

However, there are risks involved with allowing your tenant to sublet the apartment. Essentially the tenant becomes a landlord, selecting the person who will be living on your property, collecting the rent to give to you, and keeping tabs on whether the subletter is abiding by your rules and maintaining the property. Tenant screening for a subletter is usually minimal; many tenants rely on friends or acquaintances to connect them with someone who needs a place to stay for a few months, and they trust that this person, often a stranger, will hold up their end of the bargain and pay rent on time.

If you’re willing to allow the tenant to sublet the apartment, put everything in writing – including the fact that the primary tenant is still ultimately responsible for the entire monthly rental payment and any damage that might be done to the property in his or her absence.

And if you don’t want the headache of subletting, then make sure it is expressly prohibited on the lease that your tenant signs.

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A fixed long-term lease isn’t always the way to go

Posted by alwaysscreen on April 23, 2012 None comments

When real estate owners dive into the rental property management business and become landlords, they usually seek tenants who will agree to sign a fixed lease, typically for a one-year term. While this is the standard and affords the landlord some measure of security in knowing they’ll (hopefully) have regular rental payments coming in for the next 12 months, it isn’t the only – or in all cases the best – way to go.

Landlords also can and should consider the merits of a shorter-term lease – say 6-months, or even month-to-month – when the property or the tenant warrants such terms. Generally speaking, a month-to-month lease is better for a landlord who is unsure about the tenant and who wants to ensure that he or she has an easy out if the tenant doesn’t work out. Only having a few weeks to wait until the tenant has to be out, according to a legal contract already signed, is much simpler than undergoing the sticky, stressful, sometimes expensive process of evicting a problem tenant.

Also some tenants prefer a month-to-month lease because of a particular job situation, house sale, or because they’d like to use your property as a vacation home. Typically if a tenant seeks a month-to-month lease the landlord has cause to increase the rent a little bit. And if the relationship works out favorably for both tenant and landlord and the tenant wants to make a longer commitment, the month-to-month lease can be converted into a fixed lease quite easily.

No matter the lease terms, tenant screening is something that should be consistent for every tenant. Background checks, credit checks and employment verification are still necessary, regardless of how long the tenant will be living on the landlord’s property.  

 

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Rental unit been on the market awhile? It’s time to reassess.

Posted by alwaysscreen on April 18, 2012 None comments

As a landlord, about the worst thing that can happen is renting to a bad tenant. The second worse thing is not finding a tenant. When days stretch into weeks stretch into months with no qualified tenant knocking on your door, it’s easy to panic. Don’t! A panicking landlord is a landlord who will rent to anyone who applies, regardless of their financial circumstances and tenant history.

There are a few things you should do to help get the ball rolling, though. First, consider lowering the advertised monthly rent. Take a look at other similar rental properties in your area and see how yours compares with the competition. And be realistic! If you can, take a look inside a few to see what kinds of upgrades and amenities might be included at similarly sized properties nearby. Then adjust your price accordingly.

Second, increase your marketing efforts. Make sure your marketing pieces and classified ads highlight the best features of the rental property and downplay any downsides. Include location, nearby amenities, special features and anything else that tenants are looking for (covered parking, lots of storage, washer and dryer included).

Third, consider alternatives. Is your rental property in an area that attracts vacationers? Is it near a business park that might make it ideal for contract workers from out of town who are looking for a short-term lease? Get creative about who might be interested in your property and specifically target that demographic with your marketing efforts.

 

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Three key ways to avoid a bad tenant

Posted by alwaysscreen on April 16, 2012 1 comments

Some people shy away from becoming landlords because they fear the worst. They’ve heard horror stories of terrible tenants who destroy property, don’t pay rent on time, and slip away in the middle of the night, not honoring the rules of the rental agreement.

What those people fail to realize is that finding the best tenants has much more to do with them than with the tenants themselves. Sure, there could always be a bad luck scenario, or a wolf in sheep’s clothing, but for the most part a landlord has three key ways of ensuring they only attract and select the kind of tenant that will honor the rental agreement and the property itself. Those three things are:

  1. Have the best product. If the rental property a landlord is trying to market is in disrepair, if it hasn’t been painted in years, if the plumbing is terrible, if any number of maintenance issues haven’t been addressed, then that landlord should not expect high-quality tenants to be interested in renting it.
  2. Have the best price. If your rental property is underpriced, you run the risk of attracting underqualified tenants. If your rental property is overpriced, you run the risk of attracting a very limited number of tenants and might become desperate to approve the first person who shows interest, regardless of their ability to meet the monthly rental payment.  
  3. Screen your tenants. Tenant screening is a critical third step toward insulating yourself from the danger of approving unqualified tenants to rent your property.  Every applicant you’re seriously considering should undergo a background check, credit check, and employment verification.

If you ever find yourself on the unlucky end of a bad tenant situation, reflect on these three points and see if there’s any way you could have avoided such a headache.

 

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Tax break benefits commercial property owners who make energy-efficient improvements

Posted by alwaysscreen on April 9, 2012 None comments

If you are a commercial property owner, you could see some significant tax savings by using an underused tax break for making certain energy-efficient improvements to your property.

Section 179D is a tax break that rewards the inclusion of certain energy-efficient systems in the construction or improvements of new and existing commercial buildings. The deductions are:

  • $1.80, the maximum deduction per square foot, when energy reduction is certified to be at least 50 percent
  • $0.60 per square foot for certified energy reduction of at least 25 percent (50 percent for warehouses)
  • $0.30 per square foot for certified energy reduction of at 16.3 percent

The reductions have to be attributed to the construction of or improvements made to cooling, heating, ventilation, hot water and interior lighting systems. The reduction also must be certified by a registered IRS-qualified engineer or contractor using Department of Energy-approved software.

The tax deduction is substantial. For example, improvements made to a 60,000-square-foot building could result in a $108,000 tax deduction. Section 179D is available for qualifying improvements implemented before Jan. 1, 2014, but the deduction must be taken for the year the improvements were placed in service.

 

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